LONDON: YTL Corp Bhd is preparing to inject its UK properties, estimated to worth over RM1 billion, into its global hospitality real estate investment trusts (YTL Reit) next year.
The group, through YTL Hotels & Properties Sdn Bhd, owns and operates five luxury hotels across United Kingdom.
They are The Academy Hotel in Bloomsbury district, Threadneedles Hotel in London, Monkey Island Estate in the village of Bray, Berkshire on the River Thames, Gainsborough Bath Spa in Bath and the Glasshouse hotel in Edinburgh, Scotland.
YTL Corp executive director Datuk Mark Yeoh said all the five hotels are performing well in terms of occupancy and revenue.
“The hotel business has been very robust since we acquired the properties. All the numbers are very positive. The yields are good, giving us over six per cent per annum. We continuously aim for higher numbers,” Yeoh told the New Straits Times in an exclusive interview here.
Yeoh, who is also executive director for YTL Hotels, added that the group had invested circa about 100 million pounds to acquire and refurbish the properties in the last three to four years.
He said YTL had a global mandate to grow the YTL Reit business and it had been expanding steadily over the years.
YTL Reit, listed in 2005, had a market capitalisation of about RM2.28 billion as at October 3 thisyear, with a wide portfolio of prime hotel properties valued around RM5 billion.
The hospitality assets range from business to luxury hotels and are spread across a range of unique locations worldwide.
In Malaysia, these include the JW Marriott Hotel Kuala Lumpur, The Majestic Hotel Kuala Lumpur, The Ritz-Carlton, Kuala Lumpur (Hotel and Suite wings), the Pangkor Laut, Tanjong Jara and Cameron Highlands resorts and the Vistana chain of hotels in Kuala Lumpur, Penang and Kuantan.
The Reit's international portfolio comprises Hilton Niseko Village and The Green Leaf Niseko Village in Japan and the Sydney Harbour, Brisbane and Melbourne Marriott hotels in Australia.
“When we invest in a property, we give it a three to five years horizon. Our properties have to be reitable. We have investors or unit holders who are always with us. They have been long term with us. We have investors dialogue and they are always asking us about expansion.
“We told them when the hotel business matures, and when it gives a lot of yield or yield accretion, we will offer it to the Reit and this is what we are working on doing currently. The numbers are getting there for the London properties,” he said.
YTL Reit’s fourth-quarter net property income (NPI) grew 3.7 per cent year-on-year because of higher master leases, which in turn, was mainly due to the acquisition of The Green Leaf Niseko Village in Japan in September last year.
The NPI increase to RM60.26 million in the fourth financial quarter ended June 30, 2019 (4QFY19) from RM58.11 million a year ago.
Its realised income grew 6.8 per cent to RM35.77 million from RM33.49 million in 4QFY18.
Quarterly revenue increased 1.8 per cent to RM118.67 million from RM116.6 million in 4QFY18.
YTL Reit declared a final income distribution per unit (DPU) of 2.1 sen per unit for the financial year ended June 30, 2019 (FY19). The payout represents 100 per cent of the total distributable income for FY19.
For full FY19, YTL Reit’s NPI increased 1.8 per cent to RM253.28 million versus RM248.83 million the previous year, while revenue fell two per cent to RM490.9 million from RM501 million in FY18.
Its realised income for the year remained flat at RM134.15 million compared with RM134.011 million.
“Our Reit is now giving circa over six per cent so whatever assets we put in they must achieve REIT-accretion. The UK assets are just perfect to grow YTL Reit.
“We are opportunistic investors now. We have a pipeline of assets coming in and we want to constantly give to the Reit. By early 2021 YTL Reit will be bigger than its current size,” said Yeoh.